The Department of Justice will not back down from enforcing antitrust laws against so-called "killer acquisitions," where dominant companies purchase startups before they can become competitive threats, according to Justice Department Associate Attorney General Vanita Gupta.
Five things to know:
1. Acquisitions of young competitors "are one category of particularly concerning transactions because they undermine competition that can disrupt monopolies," Ms. Gupta said at the Georgetown Law Global Antitrust Enforcement Symposium on Sept. 14, according to CNBC.
2. Ms. Gupta said the department "will not shy away" from challenging acquisitions such as Visa's, in which the company tried to acquire payments startup Plaid. Visa ultimately abandoned the merger after the government's efforts to block it.
3. While Ms. Gupta said the Justice Department will be careful not to deter investments in new startups, it will ensure these nascent companies have a competitive economy so that dominant digital players cannot thwart competition.
4. Digital health has seen an explosion of funding and mergers and acquisitions activity so far this year; startups in the industry raised $14.7 billion in the first six months of 2021, meaning the sector already has surpassed the $14.6 billion it raised in all of 2020, according to digital health venture fund Rock Health.
5. Nearly 50 mega deals, transactions worth $100 million or more, accounted for 59 percent of digital health's total funding in the first half of 2021, according to Rock Health.